The Economy Of Bolivia. A brief sketch of the modern economy of Bolivia

Bolivia is a resource rich country with strong growth attributed to captive markets for natural gas exports. However, the country remains one of the least developed countries in Latin America because of state-oriented policies that deter investment and growth. Following a disastrous economic crisis during the early 1980s, reforms spurred private investment, stimulated economic growth, and cut poverty rates in the 1990s. The period 2003-05 was characterized by political instability, racial tensions, and violent protests against plans - subsequently abandoned - to export Bolivia's newly discovered natural gas reserves to large Northern Hemisphere markets. In 2005, the government passed a controversial hydrocarbons law that imposed significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company in exchange for a predetermined service fee. The global recession slowed growth, but Bolivia recorded the highest growth rate in South America during 2009. High commodity prices since 2010 sustained rapid growth and large trade surpluses. However, a lack of foreign investment in the key sectors of mining and hydrocarbons, along with conflict among social groups pose challenges for the Bolivian economy. President Evo MORALES passed an investment law and promised not to nationalize additional industries in an effort to improve Bolivia’s investment climate.

note: based on percent of population living on less than the international standard of $2/day (2011 est.)

Household income or consumption by percentage share:

lowest 10%: 0.8%

highest 10%: 33.6% (2012 est.)

Distribution of family income - Gini index:

46.6 (2012)

57.9 (1999)

country comparison to the world: 29

Budget:

revenues: $16.59 billion

expenditures: $16.76 billion (2014 est.)

Taxes and other revenues:

48.7% of GDP (2014 est.)

country comparison to the world: 17

Budget surplus (+) or deficit (-):

-0.5% of GDP (2014 est.)

country comparison to the world: 52

Public debt:

35.3% of GDP (2014 est.)

35.6% of GDP (2013 est.)

note: data cover general government debt, and includes debt instruments issued by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities